Huawei and China: Not Just Business as Usual

Journal of Political Risk, Vol. 8, No. 1, January 2019 

By Douglas Black

A man looks at his phone near a giant image of the Chinese national flag on the side of a building in Beijing, during the 19th Communist Party Congress on October 23, 2017. GREG BAKER/AFP/Getty Images

To the average consumer around the world, Huawei is likely thought of as a Chinese company that makes nice phones — a “Chinese Apple” of sorts. The average American consumer might associate the firm as one that makes nice phones but, for some vague, political reasons, is not trustworthy. As of early December, the average Canadian consumer might recognize Huawei as the company at the focus of some political gamesmanship between the US, Canada, and China. All of these lay-interpretations are indeed valid, but there is a great deal more going on than revealed by a cursory glance. This article is intended as a brief explainer of Huawei’s history and current market position, the importance of the company to the ruling Communist Party and their strategic goals, and the far-reaching implications of the outcome of the arrest of Chief Financial Officer Meng Wanzhou.

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Senate Undermines America as an Alliance Partner: The Resolution to Ban US Military Assistance in Yemen

Journal of Political Risk, Vol. 7, No. 12, December 2018 

By William R. Hawkins

Tribal gunmen loyal to the Huthi movement brandish their weapons on March 26, 2015 during a gathering in Sanaa to show support to the Shiite Huthi militia and against the Saudi-led intervention in the country. Warplanes from a Saudi-led Arab coalition bombed Huthi rebels in support of Yemen’s embattled president, as regional rival Iran warned the intervention was a “dangerous” move. Credit: MOHAMMED HUWAIS/AFP/Getty Images

Those who pushed the U.S. Senate to adopt Senate Joint Resolution 54 (S.J.Res.54), “A joint resolution to direct the removal of United States Armed Forces from hostilities in the Republic of Yemen that have not been authorized by Congress” in mid-December sought to avoid any mention of the strategic importance of Yemen, the nature of the civil war that has been raging there, or the support Iran has been giving the Shia Houthi rebels who started the conflict. Instead, the resolution aimed only at the U.S.-Saudi alliance and the Saudi-led coalition that is fighting to defend the internationally recognized Yemen government. No American combat units are involved in the Yemen conflict. The U.S. has been providing intelligence and logistical support to give a critical edge to the coalition forces that are doing the actual fighting.

The supposed purpose of the resolution was to “punish” Riyadh over the killing of Jamal Khashoggi, a Saudi activist working to topple the regime. He is commonly called a “journalist” but was actually only a writer of opinion pieces published by The Washington Post and other liberal outlets. His views were not compatible with American interests in the Middle East as I outlined in the October 20 issue of this journal.

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Wall Street Elites Against Democracy? A Case Study in Pro-China Media Bias

Press Reaction to the November 2018 speech by Dr. Peter Navarro, Director of the White House Office of Trade and Manufacturing Policy, was biased in a negative direction.

Journal of Political Risk, Vol. 7, No. 12, December 2018 

By Anders Corr, Ph.D.

U.S. President Donald Trump delivers remarks before signing ‘Section 232 Proclamations’ on steel and aluminum imports with (2nd L-R) Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross, U.S. Trade Representative Robert Lighthizer and White House National Trade Council Director Peter Navarro in the Roosevelt Room of the White House on March 8, 2018 in Washington, DC. Trump signed proclamations that imposed a 25-percent tarriff on imported steel and a 10-percent tarriff on imported alumninum. (Photo by Chip Somodevilla/Getty Images)

Dr. Peter Navarro, Director of the White House Office of Trade and Manufacturing Policy, gave a speech on November 9 at the Center for Strategic and International Studies (CSIS) in Washington, D.C. The title of the speech was “Economic Security as National Security”, which Dr. Navarro, a Harvard-educated economist, argues is the maxim of the Trump Administration. After the speech, Dr. Navarro was attacked in the media, but not about his main points. The negative, and one might argue biased, coverage came from the Wall Street Journal, CNBC, the Atlantic, and Director of the National Economic Council, Larry Kudlow, among others. The negative response centered on Dr. Navarro’s controversial claim that Wall Street elites have undue influence on U.S. policy having to do with China.  Tempers were likely frayed at the time due to planning, negotiations and internal maneuvering in advance of a high stakes late November meeting then being planned between Presidents Trump and Xi Jinping at the G-20 meeting in Argentina. Worries were high that lack of progress on at least the outline of an agreement at the meeting could lead to deepening tariffs between the countries, and fears in the financial sector of falling stock markets or even a recession. But the bias and infighting of the attacks were unbecoming of these media outlets, and of Mr. Kudlow, the Director of the National Economic Council.

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How to Block China at the WTO: Use GATT Articles XX-XXI

Journal of Political Risk, Vol. 7, No. 9, September 2018 

By William R. Hawkins

The People’s Liberation Army (PLA) Liaoning aircraft carrier, bottom, sails past a container ship in Hong Kong, China, on Friday, July 7, 2017. Photographer: Justin Chin/Bloomberg via Getty Images.

The Ministry of Commerce of the People’s Republic of China (PRC) has announced it will file a complaint with the World Trade Organization (WTO) against the U.S. imposition of 25% tariffs on $16 billion worth of Chinese goods in August. This was the second tranche of tariffs imposed by President Donald Trump as the result of the U.S. Trade Representative’s (USTR) “findings of its exhaustive Section 301 investigation that found China’s acts, policies and practices related to technology transfer, intellectual property and innovation are unreasonable and discriminatory and burden U.S. commerce.” This second tranche brought the total of Chinese imports subject to higher duties to $50 billion, as announced in June. Beijing’s response was given by the state-owned People’s Daily: “By launching the complaint under the WTO dispute settlement mechanism, China is to safeguard free trade and multilateral mechanisms as well as its legitimate rights and interests.”

The USTR report on China’s use of government regulations to force joint ventures (which give majority control to Chinese “partners” of American firms); mandate technology transfers, facilitate “the systematic investment in, and acquisition of, U.S. companies and assets to generate large-scale technology transfer…[and] support cyber intrusions into U.S. commercial computer networks” is not a description of free trade.

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Reason, Imagination and Invention in the South Pacific: The Laser Beam Kiwi

Journal of Political Risk, Vol. 7, No. 6, June 2018 

By Bernard Cadogan, Ph.D.

Troops pose with the “Laser Kiwi” flag, submitted to the New Zealand Flag Consideration panel in 2015 by James Gray. Source: Reddit.

Address to the U.K. Defence Academy, Shrivenham, 7th February 2018

New Zealand is proof that nature does not always abhor, a vacuum. The country is truly, “the last, the loneliest and the loveliest” as Rudyard Kipling declared Auckland to be in his “Song of the Cities”. Strategic systems never tolerate vacuums. They punish confusion and ambivalence. New Zealand is no redoubt, nor is it overlooked.

The intention of this address is to consider New Zealand’s sense of geopolitical reality. Are we proof that the Versailles Conference unassociated Organisation for Economic Co-operation and Development (OECD) nation state has been outclassed in the 21st century Pacific? Are we a living fossil ?

Woodrow Wilson envisaged a world in which there would be no assemblages such as empires, nor alliance systems even. Sovereignty-pooling exercises such as the European Union and Mercosur or Caricom would have been anathema to Wilson. They are not an option for us.

When asked at the Versailles Conference, why we had made the effort we did in the Great War, our Prime Minister Bill Massey replied, “we did it for Civilisation”.

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Trade Strategy is a Proper Part of National Security

Journal of Political Risk, Vol. 7, No. 6, June 2018 

By William R. Hawkins

Chinese-chartered merchant ship Cosco Shipping Panama crosses the new Cocoli Locks during the inauguration of the Panama Canal expansion in Panama City on June 26, 2016. A giant Chinese-chartered freighter nudged its way into the expanded Panama Canal on Sunday to mark the completion of nearly a decade of work forecast to boost global trade. Photo: JOHAN ORDONEZ/AFP/Getty Images.

On June 4, the Koch brothers (Charles and David) announced the launch of a “multi-year, multimillion-dollar” campaign against the tariffs and trade restrictions imposed by the Trump administration; especially those levied on China. The billionaire brothers are regularly called “conservatives” because they make large campaign donations to Republican candidates. But they are not conservatives; they are libertarians, a very different breed of cat. And their donations to the GOP are meant to sway the party in their ideological direction, not merely support it. The liberal media tries to tarnish conservatism by placing libertarians on “the Right” even though this is not their intellectual origin. This is done to further the left-wing narrative that “conservatives” are self-interested, greedy individuals who are enemies of organized society and the common good. This is true for libertarians, who doubt the very legitimacy of the nation-state or the “higher” norms of society. Too often they define right and wrong on the basis of whether it turns a profit.

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A Peculiar Chess Game in North Korea《奇怪的棋局》

Journal of Political Risk, Vol. 6, No. 5, May 2018

By Wei Jingsheng (魏京生)

Wei Jingsheng (魏京生) was the most famous Chinese dissident in 1979, when Deng Xiaoping put him on a nationally televised trial for writing the essay, “The Fifth Modernization: Democracy.” He received 15 years in prison. After meeting with President Clinton’s Assistant Secretary for Human Rights in 1993, he was put back in jail for another 14 years. He served 4 years of his second jail term before being exiled to the United States in 1997. A number of points are new in his latest article, published in English for the first time here. In particular, the discussion of China’s President Xi obstructing the Trump/Kim summit has very serious implications for the future of U.S.-China relations, and the credibility of President Xi as an interlocutor in Korean peace negotiations. Wei Jingsheng’s piece was originally published on Radio Free Asia’s blog and dated May 17, 2018. The article, including its Beijing slang, has been translated into English below.

Chinese human rights activist Wei Jingsheng (left) and American politician US President Bill Clinton talk together in the White House, Washington DC, December 8, 1997. (Photo by Robert McNeely/White House/Consolidated News Pictures/Getty Images)

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China Grew Up, and Now? Utilitarianism, Democracy and A Moderating Role for the Holy See

Journal of Political Risk, Vol. 6, No. 2, February 2018

By Francesco Sisci

In the past few months, stretching out no longer than a couple of years, an important controversy has mounted in America and the West, in which some argue that we foreigners were fools to believe we could change China. China in the past 40 years, since the U.S. started cooperating with her, taking her under wing, just fooled us and did what it always wanted – remained communist (thus anti-capitalistic) and with a value system different than ours (and thus against our value system). The Holy See, who has proven capable of striking deals in China and also holds a high moral ground in the West, may be able to find a middle way.

Red Guards of the China Foreign Affairs University make a vow with “from Chairman Mao” in hands in front of Tiananmen Rostrum in October, 1966 in Bejing, China. Red Guards were a mass paramilitary social movement of young people in the People’s Republic of China (PRC), who were mobilized by Mao Zedong in 1966 and 1967, during the Cultural Revolution. Source: VCG via Getty Images.

Chinese soldiers march with riot shields outside the Great Hall of the People in Beijing, after the introduction of the Communist Party of China’s Politburo Standing Committee, the nation’s top decision-making body, on October 25, 2017. China unveiled its new ruling council with President Xi Jinping firmly at the helm after stamping his authority on the country by engraving his name on the Communist Party’s constitution. Source: GREG BAKER/AFP/Getty Images.

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Boeing-Embraer Deal: Consequences for the Global Aircraft Industry

Journal of Political Risk, Vol. 6, No. 2, February 2018

By Evodio Kaltenecker

Boeing, the world’s largest aerospace company, initiated negotiations in December 2017 with Embraer, the world´s third-largest aircraft maker.  The Chicago-based US aerospace giant is pursuing a business agreement with the Brazilian jet maker in a global competition with Boeing´s European rival, Airbus.  The US and Brazilian companies have discussed the idea of a joint venture in which Boeing could take a stake of up to 90 percent in the Brazilian aircraft maker’s commercial business. That business unit will likely exclude sensitive military business to reduce Brazil´s concerns about sovereign defense capability. [1]

The KC-390. Source: Brazilian Government.

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China’s $60 Trillion Estimate Of Oil and Gas In The South China Sea: Strategic Implications

U.S. hydrocarbon estimates imply a maximum of $8 trillion worth of oil and gas in the region, explaining part of the strategic divergence of the two superpowers.

Journal of Political Risk, Vol. 6, No. 1, January 2018

By Anders Corr, Ph.D.

China’s estimates of proved, probable and undiscovered oil and gas reserves in the South China Sea imply as much as 10 times the value of hydrocarbons compared with U.S. estimates, a differential that has likely contributed to destabilizing U.S. and Chinese interactions in the region. While China estimates a total of approximately 293 to 344 billion barrels of oil (BBL) and 30 to 72 trillion cubic meters (TCM) of natural gas, the U.S. only estimates 16 to 33 BBL and 7 to 14 TCM. Considering that the inflation-adjusted value of oil vacillated between approximately $50 and $100 per barrel (in 2017 prices) since the mid-1970s, U.S. estimates imply a hydrocarbon value in the South China Sea between $3 and $8 trillion, while Chinese estimates imply a value between $25 and $60 trillion. In addition to other factors, China’s greater dependence on oil imports and higher estimates of hydrocarbons in the South China Sea have driven it to invest more military resources in the region. An overly economistic approach by the Obama administration probably led the U.S. to allow China’s expansion in the South China Sea too easily.

Photo taken on June 13, 2015 shows the Xingwang deep-sea semi-submersible drilling platform at Liwan3-2 gasfield in the South China Sea. China’s largest offshore oil and gas producer CNOOC Ltd. announced on July 3, 2015 that its Xingwang deep-sea semi-submersible drilling platform started drilling at 1,300 meters underwater in Liwan 3-2 gas field in the South China Sea. Credit: Xinhua/Zhao Liang via Getty Images.

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